Blog & Insights
Customer-Focused Collection Strategies
When creditors and lenders take on the task of managing the collections process themselves, they must take a strategic approach to this task. An important part of any collection strategy is keeping the customer at the forefront of your plans. But these collection strategies must also help organizations be as efficient and effective as possible. Of course, technology solutions can help with this.
Where to begin?
Making collections in today’s digital age is a much different process than in previous years. Digital communication is the norm for today’s consumers, so collections and recovery organizations must be able to connect with these customers through digital channels.
Because of this, collections and recovery organizations must first conduct an honest evaluation of their current state of affairs before starting any collection strategies. What is the level of digital maturity? Is your organization still heavily analog? Just how much of a technology investment is needed?
In addition, where does this investment fit into the organization’s operating model? Is it going to benefit the entire organization and its processes?
For most organizations, some type of investment is necessary. And one of the most critical investments should be in a data analytics team. The digital world provides organizations with a host of data about customers and their preferences. This data is vital in creating collection strategies, as well as in streamlining business operations and employee training.
Any investment must also enable omnichannel communication with your customers. This includes connecting with them through their favorite channels. And it includes providing them with critical information, such as any payment opportunities and programs being offered.
Compliance is another major concern for collections and recovery organizations. Invest in systems that have controls in place to help you stay in compliance.
And don’t forget about your employees. Investing in training and workflow platforms is critical in helping your staff be as efficient as possible. And they must address the needs and requirements of today’s new remote workforce.
The customer experience
For most collections and recovery organizations, methodically crafting your collection strategies makes sense and aligns with the type of service you are trying to provide.
And much of it is built on the data gathered by the systems you just invested in. These platforms contain data to help you build programs and strategies designed to fit your customers’ needs.
For example, collections and recovery organizations can build flexible hardship programs that are designed with an understanding of what the customer can afford and when it is best for them to pay. These programs can also be designed to give agents guidelines and flexibility to decide what’s best for a particular customer. Empowering and training agents to carefully manage these and other difficult edge cases is critical to improving the customer experience. These empathetic collection practices help increase the chances of successfully collecting, but they also help build customer loyalty.
To make this strategy truly effective, it is important to employ agents who can understand what the customer is going through. When agents have personally experienced mortgage payments, credit card debt, and more, they can better relate to the customer. This adds to the empathetic feeling that organizations are trying to create.
The customer lifecycle
Collections and recovery organizations must address the entire customer lifecycle to not only improve the customer experience, but also to improve their chances of success. They need the tools and technology that enable them to excel in all steps along the customer journey, including:
- On-boarding: It is vital for organizations to optimize the first 90 days of a new customer relationship through personalized, omnichannel engagement. This includes providing interactive channel engagement to customers. Organizations need the tools and technology to create, orchestrate, and execute campaign management programs crafted for individual customer segments. And it must include a discovery component to understand each customer’s contact preferences and consent to maximize the impact of communication strategies for that customer down the line.
- Servicing: Agents must be able to provide personalized service using an omnichannel strategy. This requires a system that defines operational standards, as well as generates and retains clear records of all customer interactions. Agents also need automated workflows to address critical operational processes.
- Collections: Agents can create tailored treatments and offers across customer segments and channels. This drives engagement at the segment level. Agents also need a system with full integration between the agent desktop and customer self-service. It must also include regulatory compliance capabilities to prompt agents for relevant disclosures while also storing all records of all interactions.
- Recovery: The system must be powerful enough to assign and retrieve accounts placed with agencies with proper oversight, as well as process charge-off and post-charge-off transactions for accounting purposes.
When building collection strategies, collections and recovery organizations must continually focus on the customer and their experience, while still trying to be as effective and efficient as possible. Reaching out to customers on their favorite channels and using digital tools to provide self-service options are critical to improving the experience and increasing your collection success. This requires strategic investments in technology and staff training to ensure the best possible outcomes.
Want to learn more about using technology to improve collections? Read our latest eBook.